Question about 3 month rule

[jrfrank]

I know that I will soon have to file for chapter 7 bankruptcy. I owe about $18k in credit card debt at 30% interest. Plus I have a home with a crap mortgage paying around 14% and I can no longer pay the house payment combined with the credit cards. Currently I am on time with all my payments, but I have absolutely no money. Here's my question: I have terrible sinus problems, but no health insurance. I was approved for the "Care Credit" financing to get a procedure done which would improve the problem, but I know about the "3 month rule" about raising flags regarding fraud. I am not trying to defraud anyone, but I know that if I don't get this done now I will not be able to for several years. If I get it done, and keep paying my credit cards for another couple of months, and restructure the house loan to push back one payment, then file BK in 3 months, will I be OK?? I already signed a lease to move into an apartment in August, so I don't have to worry about that at least. I just don't want to have any problems when I go to file. I could hold off on this surgery if I have to, but at the same time I would love to get that done and out of my way. Anybody have any suggestions?

[SinkingFast]

If you're planning to file BK and thinking of having the procedure done to include the debt in the BK,............. That's BK fraud. Incurring new debt with the intent to Discharge it in BK.

[frankies_mom]

You should probably ask a lawyer but maybe you can reaffirm the CareCredit since you need the procedure but you need to pay in installments. This way you are doing it in good faith b/c you plan on paying it back. Or maybe you can set up a payment plan with the Dr. and once you have paid in full have the procedure done?

[emoney]

BK may only be a short term solution for you. There seems to be a pattern in your debt pattern, bad mortgage at a time when rates were under 6% a few weeks ago, and credit card debt. The CC debt means that you are spending money you do not have and now you cannot repay it.
I suggest you look at your budget issues. Oh you say you do not have a budget, well I think that is the heart of your problems.
I urge you to step back from your problems and look at how you got there and not repeat the same steps again.
Credit help and the Dave Ramsey radio program helped me, and I hope they will do likewise for you.
regards,
emoney

[JRScott]

Your home is a priority debt.

I would pay the house mortgage before I paid the credit cards.

I would avoid incurring any extra debt even if that means you have to suffer a couple more years with your sinus trouble, you don't want to risk having your case dismissed if you file.

If you plan to file in 3 months I'd just stop paying the credit cards now. Yes they'll call and harass you, but they won't do anything other than that in 3 months. Don't mention to them you are going to file bankruptcy, just tell them you haven't got any extra money to pay them.

Also you'll need to make sure you can pass the means test for the chapter 7. Its based more on your income level, allowable expenses and priority debts more than your unsecured debt such as credit cards. If you can't pass the means test they'll force you into a chapter 13.